( Weighted average cost of capital ) As a member of the Finance Department of Ranch Manufacturing your supervisor has asked you to compute the appropriate discount rate to use when evaluating the purchase of new packaging equipment for the plant . Under the assumption that the firm's present capital structure reflects the appropriate mix of capital sources for the firm , you have determined the market value of the firm's capital structure as follows : To finance the purchase , Ranch Manufacturing will sell 10 - year bonds paying interest at a rate of 6.6 percent per year ( with semiannual payment ) at the market price of . Preferred stock paying a $ 2.09 dividend can be sold for $ 25.77 Common stock for Ranch Manufacturing is currently selling for $ 55.57 per share and the firm paid a $ 2.97 dividend last year . Dividends are expected to continue growing at a rate of 4.9 percent per year into the indefinite future . If the firm's tax rate is 30 percent , what discount rate should you use to evaluate the equipment purchase ? 1 51,046,

Homework CH 14 HW Question 7, 16:27 Wor, of Points: 1 Bave (Walyhted average cost of capitan As a member of the France Depenent of Ranch Many hasad you to compute the predicate to use when the part warme for the plant. Under the interpretato che relect the coproprie of person you are on the manufactus To france the purchase, Ranch Manasturing wil 10 year borde van interest te of 6.6 percent per year with a payit) at the manset price of $1.00 Podwickpanga 12.00 un canto 17 Common stock for Harch Manufacturing is currently seling567share and refipaid a $2.7 dier wat speed to continue growing area of 4 percent pery into the inside More rate 30 percent, what course thout you to the current purchase? a. Calstate component were of The weight of cube an the trees capital round to a decimal places) Data table Source of Capital Market Values Bonds $4,300,000 Preferred stock $1,800,000 Common stock $5,500,000 (Click on the icon in order to copy its contents into a spreadsheet.) Print Done